Inventory management is essential to a successful proactive maintenance program. Maintenance managers can face pressure to keep spare part inventory levels low to decrease inventory costs.
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However, this is a bad move for several reasons: the non-availability of spare parts can cause significant financial losses in equipment downtime, unmet production targets, and expedited shipment costs.
Best Practices for Inventory Management
Spare part inventory refers to a list of stock items maintenance technicians use to replace failed equipment parts. Manufacturing facilities keep spare part supplies&#;like belts, motors, gears, and grease&#;on hand so they can fix equipment failures without needing to order and then wait for a part to be delivered.
However, spare part inventory also can include small items like printer cartridges, batteries, and light bulbs. Maintenance departments or general operational departments typically store spare parts in stockrooms on location.
Following best practices for inventory management can yield substantial benefits, including:
- Quick Responses to Emergency Repairs: Unplanned downtime is inevitable, no matter how intensive a preventive maintenance (PM) program an operations manager runs. For this reason, organizations should prioritize always having on hand the spare parts for critical machinery. Any asset integral to production goals, expensive to repurchase, or essential to safety falls into this &#;critical equipment&#; category. The quicker maintenance teams can restore functionality, the fewer downtime losses the business will occur. A CMMS (computerized maintenance management system) with parts inventory modules streamlines keeping track of part records and avoiding stockouts during emergencies.
- Improve Metric Assessments: Spare parts inventory control is vital If you&#;re looking to improve your wrench time stats and your department&#;s overall efficiency. Having critical replacement parts on hand reduces employee idle time, which later contributes to inaccuracies, such as wrench time assessments.
- Lower Expenses: While it is possible to overstock a storeroom with too many spare parts, effective spare parts management helps minimize specific expenses. Stocking spare parts for your facility&#;s most essential bill of materials eliminates rushed shipping for specialized parts, stalled production, and worker idle time.
Additional benefits of spare parts inventory include improved equipment uptime and staying ahead of any supply-chain issues.
Six Best Practices
1. Embrace Proactive Maintenance
First, if you haven&#;t already, transition your organization from a reactive maintenance strategy to a proactive preventive maintenance strategy. We know it&#;s impossible to eliminate reactive maintenance completely, but it shouldn&#;t be the core aspect of your maintenance tasks if you seek financial optimization.
2. Develop Standard Operating Procedures
Well-developed standard operating procedures (SOPs) ensure workers know how to repair assets according to company standards. In addition, SOPs outline the most efficient way to fix standard equipment issues and maintain critical machinery.
The MaintainX CMMS system on mobile allows operational managers to digitally assign recurring work orders with attached SOPs. Employees can complete checklists, take photographs of unexpected occurrences, and text managers from the convenience of their mobile devices. Using a CMMS software, like Maintainx, helps managers implement work order management best practices, providing real-time accountability and inventory records.
Digital SOP checklists (rather than outdated hardcopy spreadsheets) work well with inventory control systems by allowing you to track spare parts as they move from the stockroom to the shop floor.
3. Adopt Proper Inventory Control Measures
A cloud-based inventory management system helps lower the cost of inventory items. Records are updated automatically as technicians check parts off in online work orders. For example, with MaintainX&#;s minimum parts tracking, new parts can be ordered directly from vendors. Also, the automated features allow you to clearly define, categorize, locate, and scan all parts according to their manufacturers, costs, and purchase dates.
We recommend:
- Creating and identifying locations for parts from the lowest detail to the highest,
- Labeling bins and shelf locations for each type of part needed, and
- Attaching QR or barcodes to parts or their locations to be scanned in.
4. Understand Your Lead Times
Prioritize having spare parts on hand for critical assets instead of for non-critical assets. Even with parts inventory tracking, be sure to set reorder points to order parts with long lead times&#;those that take longer to ship and may force you to incur extra costs for expedited delivery&#;first. Think of the parts you always want to have on hand as &#;stock&#; parts and those that you don&#;t need on hand as &#;non-stock&#; parts.
5. Calculate Risk
Calculate the risk of downtime for each asset to adequately stock parts for those at high risk of failure. Two key performance indicators that are especially useful here are Mean Time to Repair (MTTR) and Mean Time between Failure (MTBF). Remember this: a preventive maintenance plan on these high-risk assets will help stave off downtime.
6. Enforce Security Measures
This one is always hard, but be sure to limit access to your spare parts inventory. Use QR and barcode scanning features to track parts, assets, and locations. Such security measures will enable you to effectively monitor and track the movement of spare parts in and out of your spare parts warehouse.
The MaintainX Parts Inventory Module
MaintainX&#;s Parts Inventory module helps organizations efficiently manage, restock, locate, and assign a list of parts to work orders and assets. By effectively managing inventory, organizations can:
- increase productivity,
- decrease downtime and waiting on necessary parts,
- reduce spending on parts, and
- ensure parts availability when needed.
We have streamlined parts inventory so you can easily connect it to your maintenance management program and work order processes. MaintainX&#;s full array of integrated features includes:
- Automated low-quantity alerts save time, energy, and resources.
- Digital reporting allows for analyzing asset breakdown patterns.
- Connected-workforce capabilities help manage multiple remote locations.
- Vendor data management keeps contact information at your fingertips.
- Asset data management allows for cataloging barcodes, serial numbers, and more.
- Digital checklists support standardization and reduce worker errors.
- Timestamps provide digital audit trails and proof of compliance.
The success of your spare part inventory management program depends on your ability to prevent problems before they happen. We know that using our mobile-first CMMS dramatically changes how workers do their work. From completing preventive work orders to recording real-time data to ordering spare parts directly from the work site, MaintainX helps you get work done by seamlessly integrating your parts inventory with vendors and purchase orders.
It's essential to keep spare parts inventory managed to ensure operations in Managing spare parts inventory is important to running an efficient operation and stockroom. Spare parts and critical parts are the life blood of manufacturing business, especially when a problem occurs or equipment failure. Spare parts inventory management depends on disciplined processes, utilizing good inventory software and management oversight.
Often, spare part warehouses and inventories do not receive the attention needed to ensure that they operate efficiently and remain accurate. The following are often reasons for the challenges:
Spare part stockrooms don't generate income for the company, so they are given fewer resources.
Accurate inventory
tracking is not front and center for spare parts.
T
he
inventory management software
is not utilized or is not capable of managing inventory accurately.
Not utilizing barcodes to manage inventory and movements, or the perceived effort is too large to use barcodes.
No documented processes and poor processes leading to
human error
.
Not maintaining proper
inventory level
s or
inventory cost
s.
Lack of good management and personnel.
This mindset, along with failing to manage spare parts systematically and failing to utilize warehouse inventory best practices, can be costly. A lack of focus on spare parts inventory control and inventory management software is difficult and very painful.
Fortunately, there are things that can be done that will help ensure that problems don&#;t arise, and your parts warehouse will run smoothly. An accurate parts inventory system allows the parts department to be more proactive and responsive to the plant.
Companies can save significant dollars by not having to expedite a part when in fact it is already on-site in the warehouse. Here are seven spare parts inventory management best practices for managing parts inventory more effectively:
1. Systematically Identify all Parts
A crucial aspect of all operations is a proper spare parts management system managing all inventory tracking and transactions. For these systems to be effective, each unit of inventory must be:
All SKUs must be identified within the inventory management system
Utilize the manufacturers barcode or create a barcode for internal use.
For small items such as screws and bolts, barcode the bin for scanning purposes.
Discontinue older, unused spare parts so as to not accidentally trigger purchasing, etc.
Properly maintain BOMs within the system to keep accurate
inventory level
s.
Utilize asset tracking using RFID when necessary.
Regardless, all spare parts and inventory levels must be managed and maintained in the inventory system. This would include inventory units that are to be recycled, remanufactured, testing and destroyed. This is designed to keep the inventory as accurate as possible.
2. Effective Management of Unused Parts
When equipment is going to be down for a major overhaul, there may be several items that are purchased for a one-time use. Because of this, some of these parts may not be a stocked item and not created as a part record in the inventory control system.
Once the machinery overhaul is completed, or unplanned downtime forced repairs, there may be unused parts which have future use and should be inventoried. Other equipment in the plant may be able to utilize these unused parts.
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Rather than maintenance storing these parts in a box, work bench or cabinet somewhere, the items should be added to the inventory control system and placed into parts inventory.
3. Utilize, Manage and Maintain Bill of Materials (BOM)
Proper spare parts management also means having accurate BOMs that are maintained. BOMs will make ordering parts and placing work orders much simpler. Additionally, make sure that your BOMs are kept up to date. The worst thing that can happen is to start creating inaccurate inventory levels because a part was not added, changed, or removed from a BOM.
Having accurate BOMs will also assist you with scheduled preventive maintenance (PM) that is needed on a given piece of equipment. In some systems, the PM schedule will generate a work order with the scheduled date of the PM. BOM updates must be done in real time to prevent downstream problems.
4. Streamline the Work Order Process
One way to improve spare part efficiency is to have a strong but simple work order process that can be followed by everyone. Work orders need to be created for all spare parts issuance so that inventory remains accurate. This process is made easier with centralized inventory which is discussed further below.
Develop a work order process that is not overly complicated but ensures that all necessary information is passed along. If it is too complicated or there are ways to get parts without a work order, you will find employees not using the desired process and inventory inaccuracies begin to occur.
Have a process where non-emergency work orders are placed in advance. Work orders requested in advance can be pulled and staged for pickup or delivered to the requesting department. This will reduce the maintenance department&#;s wait time at the parts warehouse for their work order to be fulfilled.
5. Adopt
Security Measure
s
Ensure that effective security measures are taken in the parts warehouse. Several critical practices should be considered. Limiting access to the parts warehouse inventory is crucial to maintaining inventory accuracy. Adopt a policy that parts inventories are &#;off limits&#; and only parts department employees have access.
The first way to insure this is to adopt physical security measures such as parts counters that prevent employees from entering inventory stock locations and pulling parts required. Allowing everyone to have access can quickly make parts inventories inaccurate.
The second practice to help assist in this objective is to install security camera systems and begin utilizing badge access to entry and exit points. Additionally, equipment such as vertical lift modules for spare parts provide strict security.
6. Centralized
Inventory
and Consolidate Spare Parts
Where possible, centralized inventory will provide greater control of stock levels. This also means consolidating satellite parts inventory into your main parts warehouse. With centralized inventory, you are tasking a core group of personnel to be responsible for all stock levels, real-time inventory tracking, and inventory control.
By keeping all inventory tracking and inventory control with a core group, this limits who has access to inventory units which leads to more human error.
Having centralized inventory will also make security easier.
7. Utilize an
Inventory Control
System
By utilizing your ERP&#;s warehouse functionality or a warehouse management system (WMS) - and not spreadsheets - to manage your parts inventory will ensure accuracy and ease of managing your parts warehouse.
Also, utilizing barcodes and scanning functionality in conjunction with the system will greatly enhance the efficiency of the processes in the parts warehouse and improve on inventory accuracy.
Inventory management features in most systems are around control of the physical asset. This is made easier by utilizing barcodes for real time tracking through receiving, cycle counting, stock moves, stock adjustments and issuance of inventory items.
8. Give Every Spare Part a Stock Location
Ensure that stock locations are created at the lowest detail (typically a bin and slot location for each SKU) allowed by your systems. It can be difficult for employees to locate a part if the location identifier is a shelf where many other parts are in a shared location. This should be part of a disciplined internal stock room and warehouse assessment.
By instituting the above recommendations, you will be able to have better control over your parts inventory and provide faster and accurate fulfillment of work orders and other parts requests.
9. Implement Strong
Spare
Part Inventory Management
At the heart of spare part inventory management are strong inventory processes such as cycle counting, physical inventories and proper management of inventory discrepancies. A good inventory management program requires the following:
Documented processes that are to be followed.
A consistent, disciplined inventory
cycle count
routine. A comprehensive physical inventory count at least annually, unless the
cycle count
ing is well regimented.
Management of inventory inaccuracies / discrepancies and reporting.
Real time
inventory transactions through all functions.
Well trained managers and personnel that are accountable for
accurate inventory record
s.
These inventory management strategies will keep your stockroom and warehouse running as efficiently as possible and minimize downstream issues and human error.
Summary
Unplanned downtime, asset failure and standard equipment issues of critical equipment will test even the most disciplined spare parts inventory system and stockroom.
This means that the most optimal inventory levels are maintained from a purchasing perspective. This can only be done if the inventory is accurate, pulling the right item from inventory, and timely receiving of items back to the stockroom.
Train staff well, restrict who has access to inventory, and hold the staff accountable for the most accurate inventory records. Lastly, consider how a warehouse consultant can improve your overall spare parts inventory management.
For more information, please visit Smt Spare Parts Supplier.